1. This won’t be the 1990s all over again. ACOs won’t face the same problems capitated arrangements faced in the 1990s. Capitation failed in most parts of the country because incentives were not aligned, the technology was not in place and payors slashed rates for physicians, expecting they would make it up on volume. “The country was not ready,” Dr. Silverstein says. But today the technology is better, more doctors accept the use of best practices, and rather than simply reducing rates, ACOs aim to reduce utilization and focus on quality, he says.
2. Few providers are ready. While the ACO model has the capacity to function successfully, many providers are not ready for it. Dr. Silverstein says operating an ACO involves having some experience in taking payments for overall patient care and organizations must have the IT structure in place and the know-how to use the data. The capability to do this is limited to areas where capitation is still strong, such as California, areas that have been experimenting with ACO-like products, like Massachusetts, or to organizations that have their own health plan, take risk-based contracts or self-insure and have programs to manage medical costs. He thinks it could take years for other providers to get up to speed.
3. Hospital-physician collaboration is crucial. Hospitals can no longer be removed from the rest of the healthcare continuum and will have to link up with physicians in particular. Many hospitals are buying up practices, but employing physicians won’t ensure that they will be tightly aligned with the hospital. “It depends upon the compensation plan, management and governance structure,” Dr. Silverstein says. He thinks a hospital can align itself with physicians without buying up practices.
5. It’s still unclear who will run ACOs. “Physician organizations are better positioned to run an ACO because they have the medical know-how and are not burdened by hospital infrastructure, but it remains to be seen if they can pull it together,” Dr. Silverstein says. In many cases, hospital systems or large hospitals may end up running ACOs. Smaller practices and community hospitals will not have the resources and will have to be content to link up with larger organizations.
6. Who runs the ACO will be important. If a hospital runs the ACO, it will want to direct patients to its own surgery operations rather than independent ASCs. But the extent this occurs will depend on the capacity of the hospital to accommodate the extra volume and the ACO arrangement. ACOs in the Medicare shared savings program are going to care about costs, Dr. Silverstein says. When the hospital’s needs are not paramount, the ACO will direct patients to ASCs because they will be the lower-cost, high-quality alternative, he says.
7. Few organizations have the necessary IT. Only a small minority of hospitals can meet meaningful use criteria for supporting electronic health records. Accountable care will require an added level of IT infrastructure than many EHR systems have, involving new elements like disease registries. About 8-10 vendors are developing IT systems for use by ACOs, but demand for them is still thin.
Learn more about The Camden Group.
